Commerce Weekly: Google juices its Wallet

Google pairs payment with coupons in one tap

Google expanded its Wallet this week. At some retailers — American Eagle Outfitters, The Container Store, Foot Locker, Guess, Jamba Juice, Macy’s, OfficeMax and Toys“R”Us — the lucky few Sprint customers who have Google Wallet can pay for purchases, redeem coupons and earn rewards points with just one tap.

Google showed off a video (below) of its employees at these stores, demonstrating Google Wallet to lots of very excited people. Of course, as is clear on the video, Google is paying for their purchases as part of the demo, so that may have something to do with the enthusiasm.

Google also announced a deal with the New Jersey Transit Agency to enable Google Wallet purchases through some busses, vending machines and ticket booths. Stephanie Tilenius, Google’s vice president of commerce, said “Transit has been a common element of every major successful NFC effort globally and is a critical component of Google Wallet’s success.” Isis, which is likely to become one of Google Wallet’s main competitors when it begins showing up on phones sometime next year, feels the same way. Last spring Isis announced that one of its first trials will be with Salt Lake City’s Utah Transit Authority.

Announcements like this may come and go like streetcars, but the real shift will come when more NFC-capable phones are available on more carriers. Currently, only Sprint subscribers holding Nexus S 4G phones can tap and pay with Google Wallet. HTC, LG, Motorola Mobility, RIM, Samsung Mobile and Sony Ericsson announced en masse last month that they would introduce NFC-enabled mobile devices that implement Isis’s NFC and technology standards, presumably sometime in 2012. But it will still take time before secure NFC phones are mainstream. Even so, Juniper Research is bullish on the uptake curve, predicting that NFC mobile contactless payments will reach nearly $50 billion globally by 2014.

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PayPal powers eBay’s results

EBay reported strong growth this week through its commerce channels. Fueled by PayPal and mobile payments, Q3 revenue was 32% greater than last year ($2.97 billion compared to $2.25 billion in 2010). In a conference call with analysts, CEO John Donahoe said the company expects PayPal’s payment volume to exceed $3.5 billion in 2011, five times greater than it was in 2010. At last week’s Innovate conference in San Francisco, the company showed off plans to bring PayPal to the physical point of sale. Donahoe said the company will begin rolling those payment systems, which don’t rely on NFC but rather pay through the cloud or with direct-billing technology, as soon as the fourth quarter.

Also this week, Donahoe discussed eBay, PayPal and the future of payment at Web 2.0 Summit. Video from his Q&A session is below:

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I would even venture to say it’s more secure. Right now debit cards can be used as credit and a pin isn’t even required – or a signature in some cases. On top of that, when a pin is entered, 90% of the time its on a key pad that is anything but discreet. That being said there are some things I would like to see from Google before I can take the Wallet seriously. Consumer access to Remote Wipe – When My phone is stolen or lost which it undoubtedly will be. I should be able to call Google costumer service and have them remotely wipe my phone of any and all information. They have used this feature in the past for security reasons related to malicious apps. They should extend this as a service to their consumer base. Insurance – I want it to be explicitly stated who I am insured through if my Identity is in fact stolen. Right now my bank insures me if my Debit Card is used with out my authorization but only if it is used as credit… Will Google insure me if somehow my Google Wallet is Hijacked or i’ll have to apply for UK loan? Automatic transfers – I see this system as a very viable and convenient way to avoid the BS debit card fees that banks are about to start charging consumers. If Google enables automated checking account transfers that circumvent debit cards… I’m on board.

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